Summation: HHS has set a goal of tying increasing percentages of Medicare payments to quality or value through alternative payment models, such as Accountable Care Organizations (ACOs) or bundled payment arrangements. By the end of 2018 the goal is for 50% of Medicare payments to be tied to these alternative payment models. For the remaining traditional Medicare payment arrangements, 90% of those will be tied to quality/value incentives by 2018.

Medicare is transforming itself from a “passive payer” to an “active purchaser” of high quality, efficient healthcare. As such- active participation by physicians, physician groups, and hospitals is required for payment eligibility.

At the physician/group level, hospitalists should be reporting PQRS measures. Incentive payments for PQRS ended in 2014, Medicare is now making “negative payment adjustments.” Penalties are equal to a percentage of all Medicare Part B FFS (Fee-for-Service) charges and there is a 2-year delay between reporting or performance failure and penalization.

Physician Value-Based Purchasing (P-VBP) affects all Eligible Providers (EPs) in 2015. P4P (Pay for Performance) assesses both quality and cost. Aim is for budget neutrality via “quality tiering” which rewards “high quality/low cost” practices with penalties from “low quality/high cost” practices. As of now (2015) ACPs and therapists can be penalized under P-VBP.

Key Points/HM Takeaways:

Hospitalists should be reporting PQRS measures- penalty phase has begun

all 2015 PQRS data will be posted to Physician Compare website in 2016

3 Examples of hospitalist applicable “cross-cutting measures” are

47-advance care plan

130-documentation of current medications

317-preventative care: bp screening

PQRS data must be reported with respect to MAV clusters (Measure Applicability Validation)- reporting only measure that have no MAV cluster is a safe strategy so long as one of the measures is “cross-cutting”

Maximum P-VBP penalties automatically apply if group does not report enough PQRS data